It is important to find out which armaments companies actually contribute to securing civil liberties.
(Photo: imago images/Björn Trotsky)
Since February 24th we have been living in a new world. The dream of being able to live peacefully with the big neighbor to the east has been disenchanted. Shocked, politicians around the world are trying to stop Vladimir Putin’s war without escalating it any further.
Weapons deliveries from NATO countries such as Germany are part of this. The armaments industry also sees itself strengthened by the announcement by Federal Chancellor Olaf Scholz that he would invest an additional 100 billion euros in the Bundeswehr. This puts armaments manufacturers in a new light.
A fierce discussion has now broken out among investors as to whether they should be classified as sustainable – i.e. as an economic sector with a relevant contribution to social goals. A cautious answer can be formulated: The industry should be reassessed, taking into account strict secondary conditions.
At the center of the megatrend towards sustainability are companies that take into account ecological and social criteria as well as good corporate governance in their business activities, collectively known by the abbreviation ESG. Sectors with energy-intensive production, high carbon emissions and socially ostracized goods – including all weapons so far – are excluded.
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This has consequences: Above all, medium-sized companies that are not classified as sustainable are already complaining about problems in getting loans on reasonable terms.
Clear control counts
Putin’s war is causing many investors to rethink: large investors who define their own sustainability criteria are more willing to lend capital to armaments companies than before. Much like the accident at the Fukushima nuclear power plant in Japan, a shocking event is shifting the norm.
For business with private investors, however, the fund providers need the permission of the supervisory authorities to equip sustainability funds with defense stocks. In Germany, on the other hand, there is massive resistance from churches and the peace movement.
The Russian crisis shows that a blanket no is too easy. It is important to find out which armaments companies actually contribute to securing civil liberties. These can be providers who deliver conventional weapons exclusively to democratic countries and only to addresses that have a public contract. Selling to broad sections of the population is not one of them. These conditions must be verifiable – but then they are also relevant.
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